- Summary:
- Silver price (XAG/USD) prediction is looking bullish once again as the price is having a very bullish start to the week.
Silver price (XAG/USD) is having a very bullish start to the week. During the London session, the precious metal is trading at $21.42. This translates into a 4.4% gain for the day till press time. It is not just Silver price per ounce that is showing a positive price action, Golde price (XAU/USD) is also 1.54% up for the day.
As mentioned in our previous Silver price prediction, the successful retest of the $20 level has boosted investor sentiment. The ongoing bounce is a breath of fresh air as XAU-USD fell to its fresh yearly lows last week.
XAG/USD Surges As DXY Shows Weakness
Historically, Silver and Gold have shown a strong inverse correlation with the DXY index. Since the dollar strength index turned red on Monday, XAG/USD is having a positive price action. Another factor behind this price surge is the banking concerns that occurred after the collapse of Silicon Valley Bank.
Consequently, many investors fear a similar bank run on other major banks. Although the Us government has assured the SVB depositors of complete protection, it is yet to be seen how the US market will react on its opening. It is also being speculated that the Fed might flip dovish in its tone as the high-interest rates have put major banks at risk.
Silver Price Forecast & Chart
The following XAG/USD chart shows the key support and resistance areas. It is quite evident that the price has faced a massive bounce after briefly dipping below the $20 level last week. A successful retest of the $20.6 level is still very likely. This may result in a good bullish reversal to target new highs for the year. Furthermore, a daily closure of the price above 200-MA will also be a sign of good strength.
However, a daily closure below the $20 level will invalidate any bullish thesis for the Silver price prediction. In such an event, the next demand zone lies at the $18.25 level, which was tested multiple times in 2022.
